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Bahrain's Emir Sheikh Hamad bin Issa al-Khalifa announced Saturday that his Gulf Arab state is to restore a directly elected parliament as part of a modernization program, after the house was dissolved in 1975.

"We see that democratic and constitutional developments around the world call for developing the two-chamber system," the emir said in a televised address to mark Bahrain's 29th national day.

"We will have a freely elected parliament, with deputies elected directly by the people to represent them and to carry out legislative duties," he said, promising "a better future for the new Bahrain" but without giving any timeframe for polls.

Bahrain introduced an elected parliament in 1972 but it was dissolved three years later for "obstructing the work of government."

The mainly Shiite Muslim opposition has campaigned for it to be restored, sparking unrest that cost at least 38 lives between 1994 and 1999. The unrest eased after Sheikh Hamad took over as emir last year after the death of his father.

"The way has also been cleared for full municipal council elections throughout the country," added the emir, who has already said women would also given the vote. "This means democracy for the people at national and local government levels."

Kuwait is the only other Gulf Arab monarchy to have an elected parliament, although women do not have the vote.

Bahrain has, since 1992, had an appointed consultative council of 40 members. In September, a new list included for the first time a Jew, four women, one of them a Christian, and a businessman of Indian origin.

The emir last month established a high-level committee to draw up a national charter for Bahrain, a close ally of the neighboring kingdom of Saudi Arabia.

The national charter is designed "to give impetus to the democratic process in the country" of around 650,000 people, 40 percent of them foreigners, Sheikh Hamad said at the time.

Bahrain could declare itself a kingdom without any change in the ruling system, a senior official said on December 6, reacting to Arab press reports that the emir planned to declare himself king.

Sheikh Hamad said in his national day speech that the other key aims for Bahrain's future were "further economic development and higher living standards for Bahrainis, under a thriving national economy."

"Liberalization of the economy from all obstacles and red-tape and opening the path for investments, without having them delayed by a political or administrational decision, are the main requirements for economic growth," he said -- MANAMA (AFP)